AMD now has full flexibility to pick foundry partners

Posted on Friday, May 14 2021 @ 09:56 CEST by Thomas De Maesschalck
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AMD made some amendments to its wafer supply agreement with GlobalFoundries. The updated agreement locks in minimum annual production capacity of 12nm and 14nm chips at GlobalFoundries through the end of 2024. AMD uses these nodes for trailing-edge products as well as I/O dies for its latest Zen 3-based processors.

Seeking Alpha analyzed the agreement and concludes one of the most interesting aspect is the removal of all prior exclusivity deals. Basically, AMD now has full flexibility to manufacture products at other foundries, regardless of the node used.
The companies agreed to pricing and new annual wafer purchase targets for the years 2022-24. AMD currently estimates that it will purchase approximately $1.6B of wafers during the 2022-24 period, and the company will prepay "certain amounts" for the years 2022 and 2023.

Importantly, the revised agreement removes all prior exclusivity commitments, which gives AMD "full flexibility" to turn to other foundries for any product manufactured at any node.

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Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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